The Keynesian range of the aggregate supply curve applies when the economy is at or near full employment.

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The Keynesian range of the aggregate supply curve applies when the economy is operating below full employment, with unused resources and idle labor. When the economy is at or near full employment, the short-run aggregate supply curve becomes relatively less elastic and shifts to the left, leading to higher prices and reduced output. This is known as the classical range of the aggregate supply curve.

The Keynesian Range of the Aggregate Supply Curve Applies When